Does it make sense to factor in the cost of living when determining the salary of remote employees?
Companies often do this. I don't know exactly why --- perhaps they don't either --- but I can think of a couple of plausible reasons. It seems fair to try to normalize the "real compensation" across employees. It seems likely that salaries are already generally higher where the cost of living is higher, so new offers need to be higher to be competitive.
On the other hand, supposing you have a roving developer who doesn't work in an office, it doesn't make sense to me to pay them five times as much because they choose to live in London rather than Bhopal. If they're going to be equally effective in each place, their location is their business and if they want to live somewhere cheap and live like a king, why should they be penalized for that?
There may be an interesting economic effect where companies that allow employees to be mobile and adjust pay for cost-of-living are effectively subsidizing the economies of expensive locations. I wonder if anyone's looked into that.
I think the answer to my initial question must be complicated. It should depend on how the location matters to the employer. If location doesn't matter at all to the employer, it seems to me cost-of-living should not be taken into account directly. It may have an indirect effect by raising the level an offer needs to be competitive.
Disclaimer --- this post is my opinion and is unrelated to Mozilla's policies.